国际投资条约日落条款

Tropper 2020-05-12T14:00:34 23 member states of the European Union (EU) decided that it was time to fish or cut bait.On 5 May they signed a plurilateral treaty to scrap all intra-EU bilateral investment treaties (BITs) in force between them (Termination Agreement).The timing may seem suspicious as arguments have been made that certain governmental measures adopted to stem the current Sars-Cov 2 pandemic could violate investment treaties.However, the Termination Agreement has been long in the making: in March 2018 the Court of Justice of the European Union (CJEU) ruled in its Achmea judgment that an intra-EU BIT applicable between the Netherlands and the Slovak Republic violated EU law.In January 2019 the EU member states declared that all intra-EU BITs violated EU law, were thus inapplicable and (notwithstanding their alleged inapplicability) should be terminated (for an analysis of these declarations see here).Last October member states agreed on a draft version of the plurilateral agreement to terminate intra-EU BITs and now 23 member states signed the final version of the Termination Agreement.Interestingly, Austria, Ireland, Finland and Sweden apparently have not yet

Recent developments in relation to the termination of international investment agreements (IIAs) raise a number of issues at the intersection of treaty law and investment law. This article examines some of the key aspects of treaty law as they relate to the termination of IIAs. The article addresses recent state practice in relation to the denunciation of or withdrawal from multi-party treaties related to investment including the ICSID Convention and the Energy Charter Treaty, leading to complicated questions about the effective date of termination and the implications for new or ongoing investment claims. The article also examines the unilateral termination of bilateral treaties, for example by South Africa and Indonesia, and the mutual termination of such treaties, for example within the European Union and as a result of conclusion of newer treaties such as the Trans-Pacific Partnership. In this regard, the article considers the consequences of sunset clauses, introduced because of the long-term nature of foreign investments, which can make it harder for States to extract themselves from investment obligations. These developments highlight the importance of clarity in drafting termination clauses and agreeing to terminate an IIA, so as to avoid disputes about the impact of a survival clause or its interaction with general treaty law.

The Commission of the European Union (EU) sees intra-EU bilateral investment treaties (BITs) as incompatible with the overall structure of European Union law. Against this background, certain Member States have started to terminate their treaties. Also, some of the new Member States have, in their role as Respondents in intra-EU BIT arbitrations, asserted inter alia that the intra-EU BITs had been automatically terminated upon their accession to the EU and that BIT provisions were inapplicable because of the operation of EU law. This contribution deals with these questions from a treaty law perspective and examines the alleged conflict between EU law and intra-EU BITs in investment cases as well as the consensual termination of intra-EU BITs, including the sunset clauses incorporated therein. It argues that if intra-EU BITs are already ‘in action’, their protection usually persists. On the other hand, investors enjoy only limited protection when States agree to terminate an intra-EU BIT by consent.

Sunset clauses in bilateral investment treaties (“BITs”) extend treaty protections for investments made prior to a BIT’s termination for a certain period thereafter. Although almost all BITs contain sunset clauses, their operation and termination remain unexplored in several respects. Sunset clauses have recently been put into the spotlight as a number of States, including, for example, India, Indonesia, Australia, and the Member States of the European Union, have terminated or renegotiated numerous BITs in the context of the investment treaty reform process. While it is relatively uncontroversial that sunset clauses apply when a contracting State unilaterally terminates a BIT, the application of sunset clauses in the event of mutually agreed BIT terminations raises complex issues and is largely untested. In light of the uncertainties regarding the effects of sunset clauses following consensual BIT termination, several States have sought to expressly terminate or amend sunset clauses. This article explores the operation of sunset clauses in the event of unilateral and mutual BIT terminations. It analyses emerging investment treaty jurisprudence on the application of sunset clauses following mutual BIT terminations or replacements of BITs. The article further examines the question whether under the law of treaties, contracting States may revoke sunset clauses with immediate effect and discusses potential restraints on the revocation of sunset clauses resulting from general principles of law, such as the principles of acquired rights and legal certainty. It also addresses recent State practice that seeks to neutralize the effects of sunset clauses. The article then elaborates on the impact of mutual BIT terminations and revocations of sunset clauses on pending investment treaty arbitrations.

The agreement for the termination of intra-EU bilateral investment treaties (intra-EU BITs) implements the Achmea judgment by the Court of Justice of the European Union (CJEU) and ensures the consensual termination of intra-EU BITs and the sunset clauses contained therein. Thus far, it has been signed by 23 EU member states of which 17 states have ratified it. While the 2020 Termination Agreement is based on consent of most EU member states, it raises various questions under public international law, in particular with respect to the mutual termination of sunset clauses and withdrawal of consent for any pending arbitration proceedings. This article provides an overview of the 2020 Termination Agreement and analyses its content from the perspective of public international law, addressing the termination of intra-EU BITs, the removal of sunset or survival clauses and the impact on pending arbitrations. It outlines how investment tribunals will most likely approach the agreement and what the near future of intra-EU investment arbitration will look like.

The authors analyse the changed landscape of the EU BIT policy following the Achmea decision and the 2020 Termination Agreement, in particular, their relevance for candidate countries such as Serbia. The perceived risks strongly suggest that some action must be taken before the accession to avoid becoming caught between conflicting obligations under EU law and the BITs, as happened to respondent countries in the cases of Micula and Magyar Farming Company. The potential for conflicts exists in the case of Serbia as well because it already has an obligation to comply with EU law in areas such as competition and state aid law, which may cause it to inadvertently breach investors’ rights under the BITs. Various options that a candidate country can pursue to adjust its bilateral investment treaties to EU law standards are considered in search of the best approach. Difficulties that may be encountered due to the premature termination of sunset clauses and the retroactive termination of arbitration clauses in pending arbitrations lead the authors to conclude that certain adjustments to the course of action adopted within the EU are called for. The proposed action in the case of Serbia consists of consensually amending the 22 Serbia-EU member state BITs following a two-step procedure so that the sunset clauses are terminated at once, whereas the remaining provisions of the BITs are designated by the contracting parties to be terminated on the date of accession. To prevent treaty shopping, these amendments need to be accompanied by comprehensive reform of Serbia’s other BITs that contain overly broad definitions of investors and investments. Some alternative approaches are also taken into consideration, such as the replacement of ISDS with other forms of dispute resolution and the replacement of the Serbia-EU member state BITs with other types of agreements. The candidate countries are advised to adjust their pre-accession commitments, both procedural and substantive, in a timely manner with the incoming EU obligations. These inevitable adjustments should be pursued cautiously by candidate countries to minimise risks and maximise their bargaining power.

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Abstract On 5 May 2020, 23 Member States of the EU signed a plurilateral treaty with the purpose of terminating the nearly 130 Bilateral Investment Treaties (BITs) between them (the so-called ‘intra-EU BITs’) and the 11 sunset clauses that continue in effect in intra-EU BITs that have already been terminated. The treaty, entitled the ‘Agreement for the Termination of Bilateral Investment Treaties Between the Member States of the European Union’, marks the beginning of the next—but by no means the final—chapter in the controversy over the status of intra-EU BITs. In this article, we examine one of the many important legal questions raised by the Agreement; namely, whether its attempt to undercut arbitrations commenced well before the Agreement came into force, including those resulting in awards rendered before the Achmea judgment, is compatible with investors’ rights under the European Convention on Human Rights and the Charter of Fundamental Rights of the European Union. We argue that by purporting to deprive investors of the fruits of valid claims in this way, the Agreement infringes Article 1 of the First Protocol to the ECHR (‘A1P1’) and may also breach the rights of access to justice and a fair hearing under Article 6(1) (and their equivalents in the Charter).

On June 18, 2015, the European Commission initiated infringement proceedings against five Member States over the termination of intra-EU bilateral investment treaties (BITs). In spite of targeting selected agreements, the outcome of these proceedings is bound to have broader ramifications for all existing BITs currently in force between Member States. Engaging in an assessment of the Sweden-Romania BIT, it is of pivotal importance to determine whether the substantive or procedural protections provided for investors under the agreement are compatible with the internal market. Notably, investors from Member States that are not party to the Sweden-Romania BIT are excluded from its protection. In circumstances where these investors are in a similar situation to Romanian and Swedish investors the provisions of the BIT are likely to constitute a violation of the principle of non-discrimination. However, even though the termination of intra-EU BITs appears to be the only pragmatic solution, this cannot have retrospective effect or affect currently pending disputes. Whether or not termination can avoid the prolonging effects of sunset clauses, on the other hand, primarily depends on the view of the investor-state tribunal examining the issue in accordance with international law. However, in anticipation that Sweden decides to negotiate the termination of its BIT with Romania, it is imperative that sunset clauses are addressed explicitly.

In Imperfect Alternatives: Institutional Choice and the Reform of Investment Law , Sergio Puig and Gregory Shaffer introduce comparative institutional analysis to evaluate alternative processes for resolving investment disputes. The impetus for this article is clear: many states view investor-state arbitration as akin to a horse that has bolted from the barn. Wishing to close the stable door, a wide range of states are considering the merits of various reform proposals. Puig and Shaffer's comprehensive and balanced framework for assessing the tradeoffs involved in making different choices is thus a welcome and timely intervention in these (often highly polarized) debates.

Indonesia began its BITs termination movement in early 2014 by calling off the Netherlands-Indonesia BIT 1992. As of today, 29/55 of the country’s BITs that are in force have been terminated. By adopting the normative research method and utilising statutory and conceptual approaches, this paper examines two issues: first, mapping the landscape of international investment law in Indonesia in the epilogue of its long-standing BITs regime hence the probable government’s deliberations behind the action; and second, in what way would the BITs termination movement truly serve Indonesia’s national interests and benefit its economic development while promoting and protecting foreign investments – particularly on the core element of the investors’ direct right to investment arbitration. At last, the paper concludes its discussion by offering two answers: first, two lifeboats are reserved for the protection of the country’s present foreign investment, the implementation of “Sunset Cause” contained within Indonesia’s BITs as well as protectionism provisions under the country’s national investment law and other relevant regulations; and for the second, two diverged roads are laid out to choose for the protection of future foreign investments in Indonesia, the country’s Regional Trade Agreements (RTAs) containing investment provisions or its newly born model BIT which, needless to say, at least the latter must be formulated with delicate manner if the goal is to prevail Indonesia’s interests.Key Words: Bilateral Investment Treaties; foreign investors; investor-state contracts; new model BIT; Regional Trade Agreements; sunset clauseAbstrakIndonesia memulai gerakan terminasi BIT-nya sejak awal tahun 2014 dengan membatalkan BIT Belanda-Indonesia 1992. Sampai hari ini, dari total 55 BIT negara tersebut yang masih berlaku, 29 di antaranya telah dihentikan. Dengan mengadopsi metode penelitian normatif dan menggunakan pendekatan perundang-undangan dan konseptual, tulisan ini mengkaji dua masalah: pertama, pemetaan lanskap hukum investasi internasional di Indonesia dengan berakhirnya rezim BIT yang sudah berlangsung lama juga analisa kemungkinan pertimbangan-pertimbangan pemerintah di balik tindakan tersebut; dan kedua, dengan cara apa gerakan terminasi BIT ini dapat benar-benar melayani kepentingan nasional Indonesia dan menguntungkan pembangunan ekonominya namun pada saat yang bersamaan juga mempromosikan dan melindungi investasi asing – terutama pada elemen inti yakti hak langsung investor untuk mengajukan arbitrase. Sebagai penutup, makalah ini mengakhiri diskusinya dengan menawarkan dua jawaban: pertama, dua sekoci disediakan untuk melindungi investasi asing negara saat ini, yaitu penerapan “Sunset Cause” yang terkandung dalam BIT Indonesia serta pasal-pasal pelindung dalam UU Investasi negara tersebut serta peraturan terkait lainnya; dan untuk yang kedua, dua pilihan jalan ditawarkan untuk melindungi investasi asing di Indonesia di masa depan, yaitu Regional Trade Agreement (RTA) negara tersebut yang mengandung bab investasi atau model BIT baru yang akan lahir yang, tentunya, paling tidak yang terakhir ini harus dirumuskan secara hati-hati jika tujuannya adalah untuk memenangkan kepentingan Indonesia.Kata-kata Kunci: Bilateral Investment Treaty; investor asing; perjanjian investor-negara; model BIT baru; Regional Trade Agreement; Sunset Clause

The international community has agreed to abandon investment regulation in the Doha round, leaving itself with the indispensable goal of dealing with investment regulation on unilateral, bilateral and regional basis. The expansion of the already-extensive network of bilateral investment treaties (BITs) that have been regulating foreign investment bilaterally in recent decades calls for a careful review of the network's characteristics and relationships with potential multilateral agreements in the future. This paper studies the multilateral element of the network through its reduced competitiveness factor, centralized signing mechanism, and harmonization of interpretation and implementation of the treaties by international tribunals. The strong multilateral element of a BIT suggests that the BITs network could serve as a de facto multilateral agreement, as long as governments cannot agree on similar arrangements on the multilateral level. This phenomenon could make a future multilateral agreement redundant, strengthen the developing investor-state jurisprudence, and call for inclusion of non-investment related concessions in such bilateral treaties, such as the controversial corporate responsibilities provisions. Thus, the paper demonstrates how the important BITs network is gradually becoming a humanized multilateral agreement.

Abstract The Texaco/Chevron lawsuit, which started in November 1993 and is still being litigated in 2020, is a prominent example of the process of judicialization of environmental conflict. The Ecuadorian plaintiffs claim that the oil company’s operations generated ruinous impacts on the environment and on the development prospects and health of nearby individuals and communities. The tortuous and lengthy judiciary process was further hindered by an arbitration process, an Investor–State Dispute Settlement mechanism nested in the Ecuador—United States Bilateral Investment Treaty. The significance of the case goes beyond the specifics of Ecuador and provides further arguments fuelling the protracted legitimacy crisis experienced by International Investment Agreements. The current praxis of Investor–State Dispute Settlement mechanisms is generating an asymmetrical system, protecting the interest of investors, and intruding into the space of human and environmental rights. These issues are resonating with social movements, activist scholars and policy makers who are reacting to the vulnerabilities engendered by International Investment Agreements through multipronged strategies. These asymmetries provide ammunition to resist the signing of new International Investment Agreements, support the inclusion of human and environmental rights safeguards in International Investment Agreements, and contribute to the rationale of pre-empting extractive projects that are likely to produce severe environmental liabilities. Some of the potential ways in which a somewhat more level playing field can be created include, in addition to denouncing investment agreements, transforming Investor–State Dispute Settlement mechanisms towards a format that can also accommodate the complaints of affected communities or enacting moratoria on extraction projects that are prone to adverse socioenvironmental impacts. Both strategies could prove to be productive avenues towards the achievement of justice.

Abstract This paper examines the recent decision by the Indonesian government to terminate its Bilateral Investment Treaty (BIT) with the Netherlands when it expires on 30 June 2015. It discusses the likely driving forces behind Indonesia’s decision, and its alternative future strategy. In particular, it focuses upon controversial provisions on investor-state dispute settlement (ISDS) universally included in BITs. While Indonesia’s termination may appear of minor consequence at first glance, it has significant implications in terms of Indonesia’s obligations under international law as well its capacity to exercise its rights as a sovereign state to act domestically in the public interest. The termination of Indonesia’s first investment treaty containing the ISDS mechanism is also highly symbolic because it represents the first step in a reported strategy to review all its sixty-seven BITs. Indonesia thus joins a growing number of countries concerned about perceived excessive corporate rights enshrined in investment agreements as being incompatible with national development objectives.

Arbitral tribunals’ expansive interpretation of key disciplines in international investment law in recent years has prompted a number of developing countries to implement strategies aimed at exiting the system. These range from denouncing the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”) and withdrawing consent to jurisdiction by other arbitral bodies, to denouncing the Bilateral Investment Treaties (BITs) to which they are parties. The purported objective of these initiatives is to reduce the legal exposure of these countries to international claims before arbitral tribunals, either by eliminating a forum for foreign investors’ claims or by cancelling their rights under the treaties. Whether any of these strategies will be successful in meeting this goal is still hard to say, as both the ICSID Convention and BITs have ‘immune systems’—i.e. a set of built-in self-defense mechanisms—that render them somewhat resilient to change or termination. After assessing pros and cons of each of these three ‘exit strategies’, this article argues that developing States seeking to reduce the possible negative effects of international investment arbitration, would be better off by renegotiating their BITs. Renegotiation does not require the termination of the treaty, it may be implemented at any time and does not trigger the application of ‘survival clauses’, thus making changes to the BIT immediately applicable. The article thus concludes that, paradoxically, the most rational way for countries seeking to exit the system seems to be to stay in it.

Unlike the umbrella clauses contained in bilateral investment treaties (BITs), the termination clauses and issues relevant to the termination of BITs have not sparked the same level of legal interest. BITs occupy an area in the legal system at the intersection of sensitive political and legal issues and, as such, the process of termination of BITs is not void of its complexities. This article discusses some of the issues of termination of BITs by first setting up a brief background on the termination of treaties. It then focuses on BITs and their termination effectuated pursuant to the provisions of the treaty, before turning to supposed premature termination of BITs. The discussion on damages resulting from improper termination is integrated into the debate on the benefits of renegotiation over termination. New econometric studies are more conclusive on the impact of BITs on economic growth in the host states. In this politically sensitive area, when combined with the complex political and legal considerations, the ideal of the survival of the relationship after a termination seems to be the preferred choice.

This analysis examines the legal consequences of Indonesia's termination of the Bilateral Investment Agreement (BIT) on foreign investment entering or planning to enter Indonesia after the termination date. Bilateral Investment Agreements or BITs are known as a legal umbrella for foreign investors investing in host countries, including legal protection for foreign investors in Indonesia. The Indonesian government has signed BITs with several other countries to strengthen cooperation in the investment sector. However, because the contents of the agreement are no longer to the country's development and the current investment climate and limit Indonesia's policy space in regulating matters related to the protection of national interests, Indonesia has ended many BITs. The consequence of Indonesia's termination of the BIT for foreign investors is that there is the potential for investment disputes to arise. In this situation, the provisions of the survival clause will apply to foreign investments made before the termination date, because even though the BIT has ended, there is a certain period for the BIT to still be valid for investments made before the end of the agreement period so that in other words the agreement remains effective in protecting investors from both countries who previously existed or who had carried out restructuring before the termination date of the BIT. For foreign investments that enter or will enter Indonesia after the termination date, protection can be obtained by creating a new BIT or through a Multilateral Investment Treaty (MIT) and Free Trade Agreement (FTA) where Indonesia as the Host Country is a party to the agreement.

The previous movement of Government of Indonesia (GOI) to terminate its expiring Bilateral Investment Treaties (BITs) with many countries does not mean like the end point of rigorous policy. It then leaves a question mark about the legal standing after the concession and how the government establishes a new model to create a balance in BIT. This research is conducted to, firstly, analyze the legal position of government and foreign investor in a terminated BIT. Furthermore, it will discuss how the government can take benefit through learning experience from the previous mistakes in old BITs and the latest development in international investment law. Finally, this study focuses how a balance on BIT can be achieved for both host state and foreign investor. The result of this study shows that the government did not breach any international law procedure in particular by fathoming Vienna Convention on the Law and Treaties and protection for the investor is not diminish immediately due to the existence of survival clause. Further investigation identifies that to obtain a greater benefit following the termination, GOI should develop better balanced provisions in its next BIT model. This effort can be done by taking care of principle of extraterritorial obligation, full protection and security clause, indirect expropriation, and regulatory measure clause, and most importantly how to deal with dispute settlement.

Using the international investment regime as its point of departure, the article applies notions of bounded rationality to the study of economic diplomacy. Through a multimethod approach, it shows that developing countries often ignored the risks of bilateral investment treaties ( bit s) until they themselves became subject to an investment treaty claim. Thus the behavior of developing country governments with regard to the international investment regime is consistent with that routinely observed for individuals in experiments and field studies: they tend to ignore high-impact, low-probability risks if they cannot bring specific “vivid” instances to mind.

Abstract This chapter takes a “case study” approach to analyze the foreign direct investment (FDI) issues of Cementos Mexicanos (CEMEX) in Venezuela, vis-à-vis the treaties protecting investment that Venezuela had signed. It also examines the effects of the survival and denunciation or withdrawal clauses in the treaties that protect FDI and investor interests. It suggests that any investment treaty should contain an unlimited time period for protecting investments made from the time the treaty comes into effect and the time it is terminated. For bilateral treaties on investments and trade treaties that contain investment chapters, the parties should negotiate for the inclusion of a “survival clause” with an unlimited time period, subject to quality restrictions. The unlimited survival clause will counteract the negative effects of denunciation, protect FDI, and serve as a negotiating tool.

Foreign investment is one of the activities that has been developed during this time of econimic globalization. Many countries are competing to attract foreign investors to invest in their countries. One of the efforts is to formulate the Bilateral Investment Treaty between Indonesia and the Netherlands (Indonesia – Netherlands BIT) as a form of bilateral agreement providing the protection of foreign investment. One of the protection standard provided by the BIT is about survival clause. As it can be seen in the BIT, the survival clause alludes that even if the agreement terminated, the articles of the agreement will be remained effective for a period of time that agreed by the parties. The purpose of this research is to understand legal protection for Netherlands’ investor and the implementation of survival clause after the termination of Indonesia – Netherlands BIT. The approach that being used in this research is normative juridical. This approach is in use by means of testing and reviewing secondary data in the form of positive law, general principles of law, and the rules of law relating to the investment law. Based on the results, it can be concluded that the Netherlands’ Investor have the survival clause protection from Indonesia – Netherlands BIT and also from the Law Number 25 of 2007 concerning the Investment. In addition, the implementation of the application of survival clause is not enough to provide legal certainty for foreign investors caused of the unnecessary applied within the timeframe that agreed by the contracting parties. Therefore in the period of survival clause protection, it is possible to reformulation a new BIT. Indonesia as a developing country shall not contain a BIT with a long period of time in the survival clause provisions due to Indonesia shall be able to reformulate a BIT in accordance with the economic development in Indonesia.

hereinafter ICSID Convention].2 Prior to ICSID's creation, the international community worried that existing international arrangements for dealing with disputes between developing countries and foreign investors were inadequate.Historically, settling such claims was difficult, in large part because investors had little ability to control court access.Although the investor could resort to either local remedies or home state courts, the ability to do so was dependent on the local government's willingness to submit to a court's jurisdiction.See

Governments are facing an increasing number of arbitration claims by foreign investors relating to important public policies or seeking substantial damages, and many governments are taking a greater joint interest in how such cases are resolved in investor-state dispute settlement (ISDS). This scoping paper has supported inter-governmental dialogue about ISDS at several OECD-hosted investment Roundtable meetings. Part I compares ISDS with other international and domestic processes for resolving disputes including the WTO and European Court of Human Rights, and considers how ISDS may affect domestic policy making processes. Part II examines eight current and emerging issues in ISDS: (i) investors' access to justice; (ii) the costs of ISDS cases; (iii) remedies for foreign investors under investment treaties and their possible impact on a level playing field for domestic and foreign investors; (iv) the enforcement and execution of ISDS awards; (v) third party financing of ISDS; (vi) the characteristics, selection and regulation of arbitrators in ISDS; (vii) forum shopping and treaty shopping by investors; and (viii) the question of the consistency of decision-making in ISDS. Part III outlines key findings from a statistical survey of ISDS provisions in 1,660 bilateral investment treaties. Public comment on this paper, including 46 investment policy questions (as outlined in the paper), was obtained in May-July 2012 and is available on the OECD website.

FinalAward, (NAFTA/UNCITRAL Sept. 3, 2001).Other examples are provided by decisions concerning standards of compensation.While most arbitral panels have ruled against compensation for lost profits, in Karaha Bodas Co. LLC v.

Globally, 74 countries have domestic investment laws that mention investor-state arbitration and 42 of these laws provide consent to it. That is, they give foreign investors the right to bypass national courts and bring claims directly to arbitration. What explains this variation, and why do any governments include investor-state arbitration in domestic legislation? We argue that governments incorporate arbitration into their domestic laws because doing so was labelled ‘international best practice’ by specialist units at the World Bank. We introduce the concept of asymmetric diffusion, which occurs when a policy is framed as international best practice but only recommended to a subset of states. No developed state consents to arbitration in their domestic law, nor does the World Bank recommend that they do so. Yet we show that governments who receive technical assistance from the World Bank’s Foreign Investment Advisory Service are more likely to include arbitration in their laws. We first use event history analysis and find that receiving World Bank technical assistance is an exceptionally strong predictor of domestic investment laws with arbitration. Then we illustrate our argument with a case study of the Kyrgyz Republic’s 2003 law.

Have investment treaty arbitrators responded to the so-called ‘legitimacy crisis’ that has beleaguered the international investment regime in the past decade? There are strong rational choice and discursive-based reasons for thinking that these adjudicators would be responsive to the prevailing ‘stakeholder mood’. However, a competing set of legalistic and attitudinal factors may prevent arbitrators from bending towards the arc of enhanced sociological legitimation. This article draws upon a newly created investment treaty arbitration database to analyse the extent and causes of a shift in treaty-based arbitration outcomes. The evidence is suggestive that arbitrators are conditionally reflexive – sensitive to both negative and positive signals from states, especially influential, developed and vocal states.

Abstract More than 3,000 international investment agreements (IIAs) provide foreign investors with substantive protections in host states and access to binding investor-state dispute settlement (ISDS). In recent years, states increasingly have sought to change their treaty commitments through the practices of renegotiation and termination, so far affecting about 300 IIAs. The received wisdom is that this development reflects a “backlash” against the regime and an attempt by governments to reclaim sovereignty, consistent with broader antiglobalization trends. Using new data on the degree to which IIA provisions restrict state regulatory space (SRS), we provide the first systematic investigation into the effect of ISDS experiences on state decisions to adjust their treaties. The empirical analysis indicates that exposure to investment claims leads either to the renegotiation of IIAs in the direction of greater SRS or to their termination. This effect varies, however, with the nature of involvement in ISDS and with respect to different treaty provisions.

This article considers a number of legal issues that arise when states decide to terminate treaties providing protection to foreign investors. This is an area that is governed both by specific provisions in investment treaties, as well as by principles of general international law. The article considers two particular mechanisms that seek to promote legal certainty for investors by limiting the ability of states to peremptorily revoke the protection offered by investment treaties. Firstly, it considers minimum periods of application. Secondly, it analyzes so-called survival clauses, which serve to extend the application of a treaty to established investors for a particular period of time after its unilateral termination. The article compares the scope of these provisions under a variety of investment treaties in order to identify differences in state practice. It also discusses the limits of these mechanisms against the backdrop of general international law. Finally, the article considers whether protection is also available for established investors when both parties to an investment treaty mutually agree to terminate the treaty. In this context, the article looks at the theory of third party rights and its application in the context of investment treaties.

Driven by public opinion in host states, contracting parties to investment agreements are pursuing many avenues in order to curb a system that is being perceived - correctly or not - as having run out of control. Reassertion of Control over the Investment Treaty Regime is the first book of its kind to examine the many issues of procedure, substantive law, and policy which arise from this trend. From procedural aspects such as frivolous claims mechanisms, the establishment of appeals mechanism or state-state arbitration, to substantive issues such as joint interpretations, treaty termination or detailed definitions of standards of protection, the book identifies and discusses the main means by which states do or may reassert their control over the interpretation and application of investment treaties. Each chapter tackles one of these avenues and evaluates its potential to serve as an instrument in states' reassertion of control.

When states withdraw from bilateral investment treaties or denounce multilateral treaties related to foreign investment, a range of intersecting questions arise in domestic and international law. Recent developments have demonstrated potential incongruities between domestic and international approaches to investment protection, including as regards the effectiveness of withdrawal and the implications for existing investments. This essay reflects on international and domestic disputes involving the withdrawal of the Russian Federation from participation in the Energy Charter Treaty (ECT) to highlight these interactions. These issues have become particularly pertinent today because more than 1,500 international investment agreements (IIAs) are nearing expiry of their initial term, providing an opportunity for termination. Moreover, some states have begun to terminate or denounce investment treaties, while many more are engaging in a process of renegotiation and reform. The Russian case study also highlights the potentially far-reaching effects of a state simply signing a treaty, even many years after the state has expressed its decision to withdraw from it, and notwithstanding tensions with the domestic legal framework.

Abstract This study identifies the impact of Bilateral Investment Treaties (BITs) on foreign direct investments (FDI) by taking advantage of the random timing of 44 unilateral BIT terminations in India between 2013 and 2019. Using quarterly bilateral data of 138 foreign investors’ home countries (FIHCs), our difference-in-differences (DD) estimates uncover a significant reduction in FDI inflows to India in response to BIT terminations by more than 30 percent compared to countries without terminations. We identify the sudden break with investor protection for new investments as the major transmission channel. Further investigations suggest that investors do not necessarily abandon India in response to BIT terminations but apparently reroute FDI via FIHCs with BITs. Evidence from firm-level data reveals that investors revoke or reroute mainly deals (e.g. mergers and acquisitions) rather than own new projects. Moreover, similarity of some legal institutions with India offsets the negative effect of BIT terminations.

Abstract The recent practice of States to amend, suspend or terminate investment treaties has moved questions of potential ‘post-termination responsibility’ to the forefront of the contemporary legal discourse in international investment law. Although States have often included provisions in their respective treaties to regulate post-termination protection of investments, some aspects of the aftermath of treaty terminations are still unsettled. This article defines and discusses various types of ‘post-termination responsibility’ by reviewing current practice, doctrine and jurisprudence on the matter. In that vein, it examines terminations, modifications and suspensions that were unlawful and ineffective, or effective but not capable of releasing the State from all treaty obligations either by virtue of survival clauses or separate principles of vested or third-party rights. It then elaborates on denunciations of the ICSID Convention or terminations of BITs and their effects on pending proceedings or the right to initiate proceedings in the future. Moreover, the article discusses whether survival clauses apply solely to unilateral or also to mutual terminations of investment treaties. It will also address the question whether investor rights may continue to be protected as a result of acquired/vested rights or third-party rights. By analysing the most recent jurisprudence and practice of States, as well as more general foundations of general international law, this article aims to contribute to a clarification of these questions.

To achieve global climate change mitigation and adaptation goals under the Paris Agreement, international investment law should enable and expedite the transition away from high-emission investment toward low-emission investment. Existing international investment agreements (IIAs) providing for investor–state dispute settlement (ISDS) fail to advance climate goals and can effectively hinder states’ climate action. In this chapter, I discuss the implementation of two main policy options for climate-oriented reform of international investment law – termination of climate-unfriendly IIAs and negotiation of climate-friendly ones – at various governance levels, ranging from unilateral to multilateral action. Given the mounting risks and impacts of IIAs and ISDS, as well as the lack of evidence that they encourage foreign investment flows, terminating IIAs or withdrawing from them appears to be the most effective reform option. States seeking to conclude new climate-friendly treaties or to amend existing IIAs must ensure that the treaties legally distinguish between low-emission and high-emission investments. Climate-friendly IIAs must not hinder climate action (‘do no harm’), by denying treaty protections to high-emission investments, limiting their establishment and expansion, removing incentives such as fossil fuel subsidies, and requiring investments to be made responsibly. In addition, IIAs should leverage the potential contribution of foreign investment to climate goals (‘do good’), by incentivising, promoting, facilitating, and protecting low-emission investments only, and by supporting a just transition to a low-emission world. In line with broader efforts to reform international investment law, climate-aligned IIAs should also exclude or circumscribe controversial provisions (fair and equitable treatment [FET], legitimate expectations, indirect expropriation, and most-favoured-nation [MFN], to name a few), prohibit treaty-based challenges to climate policy measures, and deny substantive rights and access to treaty-based dispute settlement mechanisms to high-emission investments. Climate-unfriendly investors would instead need to rely on substantive rights and procedural avenues based on domestic laws.

Following a multi-year review of its bilateral investment treaties (BITs), the South African government terminated all BITs it had signed with European countries, and instead promulgated the Protection of Investment Act 22 of 2015 (PIA). The purpose of the PIA is, among other things, to protect investment in line with the Constitution, in a manner that balances the public interest and investors’ rights and obligations. The termination of the BITs and the promulgation of the PIA, however, seem to have created a gap with regard to the protection afforded to investors; compared with some of the terminated BITs, the PIA has modified or completely removed several provisions. This raises critical questions about the implications of the provisions of the new act, and whether it lives up to its name and indeed provides sufficient protection to foreign investments. The article takes the form of a comparative and analytical study of the provisions of the PIA, other South African legislation, international instruments, national and international case law and other scholarly work to assess the adequacy of the protection afforded by the act.

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The Draft CAI leaves issues pertaining to investment protection and Investor-State Dispute Settlement under future discussion, while acknowledging the effectiveness of previous BITs between China and 26 EU Member States for at least two years after the CAI has been ratified. It is of great significance to clarify the treaty relationships within the China–EU investment regime, which will heavily affect the efforts on investment treaty modernization, and profoundly impact the international investment policy landscape. In the context of treaty parallelism, the Pandora’s box, with multiple issues including but not limited to normative overlaps and contradictions, jurisdiction overlaps and contradictions, might be opened up. Moreover, survival clauses in the previous BITs and the transitional clause in the CAI need to be taken into account to ensure an effective and smooth transition from the previous BITs to the modernized CAI. By examining relevant options for addressing problems regarding treaty parallelism, treaty termination and treaty survival, this paper offers potential choices for the reform of the China–EU investment regime.

The article addresses the consequence of denunciation of international investment agreements for investor rights. It critiques the prevalent point of view that the termination of international investment treaties terminates a standing offer of the state to arbitrate disputes with foreign investors – and as such also terminates the substantive protections included in the treaties containing such a standing offer. The article explains that the prevalent point of view is premised in the law of contracts and analogizes investment protection to offer and acceptance in contract law. The article demonstrates that the analogy is not aptly drawn because the law of contract would analyze similar problems in commercial transactions under the law of third party beneficiaries rather than offer and acceptance. The law of third party beneficiaries vests the rights of investors at the time of reliance rather than at the time of acceptance. The article uses this insight to explore how the triangular relationship between home state, host state and investor is captured in international law. It concludes that treaty commitments made between the host state and the home in an international investment agreement constitutes a unilateral act addressed to foreign investors. As such, they create rights in international investors. These rights may not be arbitrarily withdrawn or frustrated. It is this analysis, rather than the analysis of offer and acceptance that governs the legal consequence for the investor of termination of an international investment treaty inter partes.

The overall trend since 1994 of growing foreign direct investment into South Africa has been a reflection of the country’s openness to investment as well as significant international trust in its institutions. Recent policy and legislative developments, including the termination of South Africa’s bilateral investment treaties with EU trading partners and the introduction of the Protection of Investment Act, are however raising concern among international investors and bringing into question the attractiveness and reliability of South Africa as a destination for foreign investment. These concerns have been compounded by increasing regulatory restrictions upon foreign investors, including stricter visa requirements, and the introduction of various other pieces of legislation that have implications upon the level of protection of property rights in South Africa. A policy shift, reflected in legislation such as the Protection of Investment Act, the Private Security Industry Regulation Amendment Bill and the Expropriation Bill, indicates an enhanced focus on the public interest aspect of the constitutional right to property in accordance with the government’s constitutionally mandated transformative agenda. A balance needs to be found between the government’s sovereign right to implement domestic policies in order to achieve its socio-economic goals, its duty to protect foreign investments, and its overall objective of promoting sustainable economic growth.

This article deals with the issue of the implementation of the Achmea judgment of the Court of Justice of the European Union (CJEU) through the Termination Agreement of Bilateral Investment Treaties (‘Termination Agreement’, TA) between some Member States of the European Union (EU). The article focuses on the analysis of the TA provisions that terminate Bilateral Investment Treaties (‘intra-EU BITs’) and investor-State dispute settlement (ISDS) among EU Members. It also describes TA provisions regulating concluded, new, and pending arbitration proceedings having as a reference the date the CJEU issued the Achmea judgment. Also, it examines how the TA regulates pending arbitration proceedings and discusses how TA Members are allowed to resort to transitional measures to resolve their dispute, throughout an amicable resolution proceeding, if they fulfil some conditions. Further, the article analyses some systemic issues of the TA, some related to the EU investment protection regime, others regarding the legal implications for intra-EU BIT provisions for EU Member States which did not sign the TA. Further, the article examines some possible issues related to the legal nature of the TA under international law and EU law.

On 29 August 2020, the Agreement for the termination of Bilateral Investmant Treaties (BITs) between 23 Member States entered into forece. This is a special agreement between Memeber States in the meaning of art. 273 TFEU. It did not come as a surprise. In the aftermath of the judgment in Achmea, Member States had already declared their intention to terminate their intra-EU BITs on the basis that their arbitration cluses were contray to EU law. The plurilateral Termination Agreement (TA) does just that. In doing so, however, it raises a number of legal questions with implications not only for the ralationship between international arbitration and EU law but also for EU constitutional law.

When it comes to reasserting control over investment relations, there is no more dramatic measure open to States than seeking to terminate agreements which provide for investment protection and binding third-party dispute settlement. While the many bilateral investment treaties (BITs) concluded in the past few decades may have affected the content and scope of the minimum standard of protection to which foreigners are entitled under general international law, the backbone of the substantive rights enjoyed by investors around the world remains treaty law. Likewise, disputes opposing States and investors can only be brought before international forums if those States give their consent, which they typically do by concluding BITs. Treaty termination may thus come across as an intuitive and effective means to grasp the nettle: by getting rid of the treaties that constrain them, States can recover the room for policy choice that has been taken away by a system of investment protection with which many have become disillusioned.

In past several years many states have started a reform of their bilateral investment treaties (BITs). The idea behind this effort is to terminate altogether or to replace the existing BITs, often perceived as unbalanced instruments, focused solely on the protection of investors and containing broad and open language, with new treaties. Serbia is, at the moment, not engaged in such process. The paper offers an overview of the BITs currently in force in Serbia. It also discusses different options for inevitable reform of Serbian BITs, bearing in mind legal, economic and political implications of three alternatives: denunciation (unilateral termination) of the existing BITs, termination by consent and their replacement with new treaties.

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A variety of legal instruments, belonging to different legal systems, contribute to the legal protection of foreign investment. Amongst them, bilateral investment treaties (BITs) have played and continue to play a prominent role with regard to both the creation of a stable and predictable normative framework and the settlement of related disputes. This chapter is intended to offer an overview of the main – and in many respects unique – features of BITs. It first describes the disadvantages, advantages and potential of the largely bilateral framework for the protection of foreign investment (Part II). It then examines the special position foreign investors enjoy under these treaties, both in substantive and procedural terms, keeping in mind that foreign investors are manifestly the main beneficiaries of these treaties, yet formally extraneous to the process leading to their conclusion, modification and termination (Part III). Part IV considers how BITs strike a balance between the sovereign prerogatives of States parties and the need to protect the legitimate expectations that these treaties create for foreign investors. Parts V further elaborates on this balancing exercise from the standpoint of the law of treaties. Part VI and VII are consecrated, respectively, to some issues of interpretation of BITs and the settlement of disputes arising from these treaties. Part VIII touches upon the interaction between BITs and State contracts, including the so-called umbrella clauses.

This Comment envisions a ¿virtuous cycle.¿ Each grouping¿s BIT provisions aim to facilitate the pursuit of the group¿s corresponding goals, facilitating graduation to the next grouping and a new set of BIT provisions and goals. While this Comment focuses on African nations, its ideas and the suggested BIT provisions may be equally applicable to other developing countries.

The adoption of the agreement for the termination of intra-EU bilateral investment treaties in 2020 is a big step forward in the long saga of these investment treaties. This agreement aims to overcome every point of discord between the investment agreements and the EU legal order by terminating both intra-EU bilateral investment treaties and the pending dispute settlement procedures that arose from them. In light of the landmark 2018 Achmea judgement, the agreement asserts that the key role should be given to the Court of Justice of the European Union in this area. This is a great endeavour since almost one-fifth of the investment arbitrations worldwide came from disputes within the European Union. However, it does not seem that the agreement will have the final say since constitutional questions were raised concerning its application. In this spirit, this article briefly outlines the legal and constitutional dilemmas intra-EU bilateral investment treaties pose in the European Union. Then, it outlines the contours and major provisions of the termination agreement, especially with regard to the pending arbitration proceedings. In light of a concrete case brought before the Hungarian Constitutional Court, the article explores the constitutional dilemmas raised by the termination agreement. It highlights three major questions: the international legal aspects, the question pertaining to the European judicial dialogue, and the constitutional principle of non-retroactivity. The article takes into account the major theoretical aspects of each of these dilemmas.

Driven to a large extent by the EU Commission, a modernization process for the Energy Charter Treaty (ECT) has been underway since 2017. While an agreement in principle (AIP) was reached in 2022, that agreement’s adoption and with it the modernization process was put on hold after the EU and its member states could not align their positions. Instead, several states – amongst them France, Germany and Poland – moved to withdraw from the treaty, followed by calls from the European Parliament and then also the EU Commission for the EU and all its member states to follow suit. These developments have left the ECT in a limbo state, with the future of the modernization process and the treaty in general now being highly uncertain. Against this background, this article analyzes the legal implications of the ECT modernization efforts and specifically the effects of the AIP, should it still enter into force. It further addresses the consequences that would follow from the realization of the current withdrawal plans, as well as their interactions with the modernization process.

Abstract The gradual rise of China as an economic, normative, and lending power has resulted in more protectionist measures in areas of the world that traditionally championed economic liberalization. Currently, 21 out of 27 European Union (EU) Member States have national laws or measures in place for the screening or review of foreign investments. However, such restrictive national measures can result in investment treaty-based arbitration under the existing bilateral investment treaties concluded by 26 EU Member States with China, as evidenced by the recent arbitration initiated by Huawei against Sweden. Therefore, this article assesses whether EU Member States are likely to see a spike in investor–State arbitral claims initiated by Chinese investors as a result of the former’s investment screening measures. To achieve this aim, the article first looks at the bilateral investment treaties (BIT)-level variables that can influence the initiation of arbitration against EU Member States, such as the presence and type of investor–State arbitration (ISA) clauses, the types of investments being made, the coverage of the pre- and/or post-establishment phases, or the inclusion of ‘non-precluded measures’ clauses. This is then followed by a look at other variables, such as the decreasing number of Chinese foreign direct investment into EU countries, the treatment of Chinese investors in recent high-profile cases, and the importance of security alliances. The article concludes that those EU States are at a higher risk of being respondents in arbitrations initiated by Chinese investors whose BITs with China include modern ISA clauses, cover the pre-establishment phase, and lack non-precluded measures clauses. However, EU States should wait for the outcome of the Huawei v Sweden arbitration before deciding whether the amendment or termination of the existing BITs with China is needed.

Abstract Following a wave of announcements from major EU Member States withdrawing or considering withdrawing from the Energy Charter Treaty (ECT), the European Commission decided to recommend a coordinated withdrawal of the EU and its Member States from the ECT. The European Commission also backs the adoption of a ‘subsequent agreement on the interpretation of the ECT’ between the EU and its Member States that would ‘clarify’ that the ECT and its sunset clause do not apply intra-EU. The sunset clause contained in Article 47(3) of the ECT has been described as a major hurdle in States’ attempt to exit the ECT. However, under an international treaty law analysis, strong arguments confirm the availability of an agreement between a subset of ECT Contracting Parties that would exclude the application of the ECT and its sunset clause in their relations inter se—including the envisaged EU agreement—as a suitable and effective alternative to modernisation of the ECT. Not only does this appear as the most desirable outcome in view of the continuing protection of fossil fuels under the modernised ECT, but such an agreement would also be firmly grounded in public international law.

Abstract States have increasingly started to terminate and renegotiate their bilateral investment treaties (BITs). Dominant explanations have however overlooked the underlying bargaining dynamic of investment treaty negotiations. This paper argues that while states initially in a weaker negotiating position have the strongest incentives to change their existing BITs, their ability to do so is constrained by their bargaining power. Such states become more likely to demand renegotiation or exit dissatisfying BITs if they have experienced sufficient changes in their bargaining power in relation to the treaty partner. This paper identifies observable implications of the weaker states’ incentives and bargaining power constraints for adjusting their bilateral investment treaty commitments. Leveraging a panel dataset on 2,623 BITs ranging from 1962 to 2019, interaction effects between bargaining power and incentives stemming from rationalist and bounded rationality assumptions about states’ decision-making are analyzed in relation to the occurrence of renegotiations and terminations. The paper finds that change in bargaining power in relation to the treaty partner is an important factor underlying the weaker states’ ability to terminate or renegotiate BITs, contributing to the study of investment regime reform and exit from international institutions.

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This article gives an overview of the bilateral investment treaties (BITs) currently in existence in South Africa and shows how the exposure to international investment arbitration has led South Africa to reassess its (lack of) policy on investment treaties and to develop a new approach to the protection of foreign investment. An analysis of the provisions of the South African BITs is done and it shows that there was no change or progression in the government's approach to the negotiation and signing of the BITs through the years; the provisions contained in these agreements are all more or less the same and have stayed the same through the years. South African BITs are found to be fairly standard when it comes to their content, other than what one could have expected of a State that was in a process of transformation when these treaties were signed and thus in a perfect situation to take its own domestic needs and policies into account. Because this was not done, there was a sudden awareness of the fact that the BITs perhaps could entail more harm than good when South Africa became involved in investment arbitrations as a result of some of its internal policies and domestic legislation leading to complaints of treaty violations. As a result of this, a review of the government's investment policy framework was undertaken and a number of its BITs were terminated; the idea is to replace them with a new domestic framework for the protection of foreign investment, doing away with investor—state arbitration as can be seen from the Promotion and Protection of Investment Bill that was recently introduced into Parliament. Disputes between investors and the South African government that arise as a result of an averred treaty breach may still be taken to arbitration in terms of the terminated BITs until the sunset period runs out. But new investors who cannot rely on the protection of a BIT do not have this option and until such time as legislation is passed and certainty is achieved on the issues of expropriation, compensation and the interaction with broad-based black economic empowerment and the forms that this may take as well as the resolution of disputes, the position of new investors and their investments is going to continue to remain uncertain.